Born into one of the wealthiest coffee-growing families in Costa Rica, Arias studied economics at the University of Costa Rica and earned a Ph.D. in political science from the University of Essex in England. In the 1960s he began working for the moderate socialist National Liberation Party (Partido de Liberación Nacional; PLN), and in 1972 he was appointed minister of planning in the government of President José Figueres Ferrer, a post he held until 1977. He was elected secretary-general of the PLN in 1979, and in 1986 he won the general election to become president of Costa Rica.

As president, Arias took measures to cope with Costa Rica’s heavy foreign indebtedness and other economic problems, but his main interest was in trying to restore peace and political stability to the strife-torn countries of Central America. He took office in the midst of the Contra war, in which rebel forces (the “Contras”), supported by the United States but based primarily in Honduras, attempted to bring down the Sandinista government of neighbouring Nicaragua. Though harshly critical of the Sandinistas, he forbade that regime’s guerrilla opponents from operating militarily on Costa Rican soil, despite pressure from the United States. In February 1987 he proposed a regional peace plan for the Central American countries that would set a date for cease-fires between government and rebel forces, ensure amnesty for political prisoners, and schedule free and democratic elections in those countries. Arias and the leaders of Guatemala, El Salvador, Honduras, and Nicaragua signed this plan in August 1987; although signed, the plan was never fully implemented, partly because of opposition from the United States.

In October 1987 Arias was awarded the Nobel Prize for Peace in recognition of his efforts to achieve the beginnings of peace in the region. In 1988 Arias used his Nobel Prize money to establish the Arias Foundation for Peace and Human Progress, which promoted peace and equality throughout the world. Arias also was active in various global nongovernmental organizations that focused their efforts on promoting peace and rooting out corruption.

Though several of his successors were linked to corruption (two were jailed briefly in 2004), Arias was untainted by scandal during his tenure as president, and he was recruited to run for the presidency of Costa Rica again in 2006. Pledging to invest in education and housing and to sign the Central American America–Dominican Republic Free Trade Agreement (CAFTA–DR) with the United States (Costa Rica had been the only Central American country not to join the pact), Arias won a narrow victory. In 2007 Costa Rican citizens voted in favour of CAFTA–DR by a slim margin in the country’s first national referendum.

In July 2009 Arias began mediating the political crisis in Honduras. Honduran Pres. Manuel Zelaya had been ousted by that country’s military in June. Arias’s proposed solutions, however, were rebuffed by Zelaya and the interim leader of Honduras. Arias, who supported the demilitarization of Central America, contended that the coup was just one result of the region’s “reckless military spending.” (See also Sidebar: Lessons of the 20th Century.)